Leadership of China Xi threatened by Covid, irreplaceable crisis

George Soros, billionaire founder of Soros Fund Management LLC, at the World Economic Forum in Davos, Switzerland, on Jan. 23, 2020.

Simon Dawson | Bloomberg | Getty Images

The position of Chinese leader Xi Jinping is in jeopardy, said billionaire investor and philanthropist George Soros.

Speaking through a teleconference at a panel with the Hoover Institution on Monday, Soros claimed that the omicron Covid-19 variant “threatens to be Xi Jinping’s accidents” because the virus is “no longer under control” in China.

“The Chinese faxes are designed to go with the [original] “Wuhan variant, but the world is now wrestling with other variants,” Soros said. “Xi Jinping could not admit this while waiting to be appointed for a third term – he is hiding it from the Chinese people as a guilty secret.”

A Chinese government spokesman was not immediately available for comment when contacted by CNBC.

Soros claimed that the only available move by Xi, therefore, was to impose China’s zero-covid policy, which has been criticized for its widespread economic consequences both at home and abroad.

The Chinese Communist Party will decide at its National Party Congress this year whether Xi will be given a third term. But Soros claimed that Xi’s attempts to impose “total control” over the country through a series of heavy lockdowns jeopardized his chances of being reinstated as the party’s leader because the strategy “is unlikely to work” against a variant as contagious as omicron. “

Xi ‘under attack’

Despite Xi’s authority over military and civilian oversight, he has “many enemies,” Soros added.

“While no one can oppose him publicly because he controls all levers of power, there is a fight in the CCP that is so fierce that it has found expression in various party publications,” he said. “Xi is under attack from those who are inspired by [former leader] Deng Xiaoping’s ideas and want to see a bigger role for private enterprise.

He also noted that China is facing an economic crisis that is central to its real estate market – a major growth engine in the country.

“The model on which the real estate boom is based is not sustainable,” he explained. “People who buy apartments still have to start paying for them before they are built, so the system is built on credit. Local governments get most of their income from the sale of land at ever-higher prices.”

China’s enormous real estate sector is under pressure as authorities try to reduce their debt dependence in recent years. A number of companies in the industry have standard, including real estate giant China Evergrande.

“It remains to be seen how the authorities will handle it [the real estate] crisis, “Soros said on Monday.” Xi Jinping has many tools at his disposal to restore confidence – the question is whether he will use them properly. In my opinion, the second quarter of 2022 will show whether he has succeeded. “

“The current situation does not seem promising for Xi,” he added.

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